These questions help define observation issues

In conjunction with a task force formed to address concerns regarding observation patients, Darla Clavier, manager of registration services at Memorial Hospital in Jacksonville, FL, developed a list of often-asked questions to help access staff handle this reimbursement category. A sample of those questions, with answers, follows:

Q. Would observation room services be covered for an overnight stay following a laparoscopic cholestectomy? The hours would be less than 48.

A. No. When it is expected that the patient will spend the night following a procedure, observation would not be covered unless there was a complication that required observation room services.

Q. If the doctor orders an admission, and the patient stays only a few hours, can this admission be billed as an observation stay?

A. No. The physician’s charge would be billed to the Part B Medicare carrier, and the reimbursement would be up to them. Only services reflective of the physician’s orders may be billed.

Q. Should the utilization review department review the observation services and issue non-coverage letters to patients when they no longer require observation?

A. Patients should always be notified of any services you believe Medicare won’t cover.

Q. Do certain diagnoses or procedures always warrant billing for observation? For example, a retinal detachment?

A. No. This could be a chronic problem with scheduled procedures. If there is an urgent admission, however, observation would be covered.

Q. A patient is admitted to observation through the emergency department on Monday with a diagnosis of chest pain. The following day, he undergoes a cardiac catheterization. He experiences no complications but is not released until Wednesday. The first day of the stay would be billed as an observation day. How would the remainder of the stay be billed?

A. If physicians know when they schedule cardiac catheters that they intend or need to keep patients overnight after the procedure, they should admit the patients for a short-stay admission.

Q. A patient is admitted for a planned surgical procedure. She is sent to the recovery room and experiences a complication of surgery. She is kept for a total of 45 hours from the time of admission. Can the total 45 hours be billed as observation?

A. No. If at the end of normal recovery time the patient is still experiencing complications, she should be moved from the recovery room area and placed in an observation room bed. Billing for an observation room should begin at the time the patient is moved to the observation room bed — unless the procedure is an ambulatory surgery center (ASC) procedure, in which case the ASC charges until midnight.

Q. If a patient receives one loading dose of IV antibiotics preoperatively and another dose six, eight, or 12 hours later, is that considered a reason for allowing the observation charges even though there is no complication?

A. No. These are antibiotics given routinely, not as a result of a complication such as a fever.

Q. Do we have to put observation charges on the inpatient bill when it is within three days before the inpatient admission?

A. Yes. If the observation room services are related to the inpatient stay, then all diagnostics must be included on the inpatient claim whether related or not.

Q. If the patient’s condition is such that he or she is fragile and unstable, could observation room charges be billable for preparation for a diagnostic test such as a prep?

A. If the patient’s condition is so fragile as to be medically unstable, the patient probably would already have been admitted to observation status for preparation and monitoring of the procedure. Medical documentation must support the medical necessity. Routine use for convenience or other non-medical reasons would not be covered.

Q. Is there a limit to the number of hours treatment room services can be billed?

A. No, but more than a couple of hours would be a concern.

Q. When a patient is in observation and then admitted as an inpatient, is the admission date the day the patient was admitted to observation?

A. No. The admission date is the date the physician wrote or verbally gave the order to admit the patient as an inpatient.

Q. Can observation charges be billed on the same date as ambulatory surgical center charges?

A. No. This would be duplicate billing of Part B facility charges.

Q. Can observation be charged when administering blood?

A. Yes, if the patient requires observation due to medical necessity or previous complications with blood administration.